Esau & Hueber signs mutual supply agreement – and receives sniping comments

Germany | After its recent supply agreement with China’s tank and vessel manufacturer NDL, Esau & Hueber is met with all kinds of snide insinuations. BRAUWELT International spoke with Christoph Sedlaczek, Managing Director of Esau & Hueber.

Mr Sedlaczek, aren’t you surprised by the reactions to your recent agreement with NDL?

Christoph Sedlaczek: Not really. Mid-sized companies and especially a traditional company like ours, that strikes some type of agreement with a Chinese firm, renders itself vulnerable to speculations. This is normal and cannot be avoided.

But your press release states in no ambiguous terms that the agreement between Esau & Hueber is a mutual supply agreement.

Sedlaczek: Indeed. Becoming a competitive total solution supplier for the brewing industry includes the supply of various types of tanks and brewing vessels. For over 40 years we have had to buy in tanks because we have never manufactured those ourselves. Thanks to the agreement with NDL we can now provide those at competitive prices for our global customer base. Let me make this clear: Rumour-mongers are mistaken if they think the agreement with NDL is a sale by another name, or a first step towards a spin off from our parent compay Bauer AG. They are wrong on both accounts.

It appears as if customers from outside Europe no longer see the need – or want to pay – for tanks and vessels which are shipped halfway across the world.

Sedlaczek: That’s true. When we did work for Coopers brewery in Australia, they insisted that we use tanks that were manufactured locally or at least in the region. Not really comparable but similar – when we built the Carlsberg/Brooklyn brewery in Klaipeda, Lithuania last year, the tanks that went into this brewery were sourced directly in Lithuania. For our Asian customers the market for tanks and vessels “Made in Europe” or even “Made in Germany” is simply not existing anymore – if it existed at all in the past years. This means that a total solution provider must be able to adapt its supplier base to market demand. That’s what we do – without any compromise on the quality of any tanks or vessels, which are part of our projects. However, that does not mean we will have all of our products manufactured at our partner NDL in China “just to cut costs” as the German trade magazine INSIDE insinuates.

You have spent quite some time looking around for a Chinese manufacturer of specific tanks and brewing vessels that can meet your specs on quality.

Sedleczek: In fact, there are plenty of Chinese suppliers that can manufacture tanks, vessels and other components at high quality. In the end, we went for NDL due to their exceptional manufacturing capability, quality and ability to best meet our requirements for our global projects. If clients want to see for themselves how their tanks are being manufactured, we are happy to invite them to come to China and do their own audit.

The huge number of domestic exhibitors at China Brew & China Beverage in Shanghai points to a growing demand for microbreweries in China.

Sedlaczek: It’s undeniable that microbreweries are cropping up all over China. Do we want to ignore this demand? Certainly not. We would be daft to do so. But do we want to set up our own office in China to better serve this important market? Again: no. Therefore our agreement with NDL was a perfect option as it combines the engineering and manufacturing expertise of both companies also for Chinese customers and those in other Asian markets. We can support each other without having to overcome the legalistic hurdles of setting up subsidiaries in each other’s countries.

This past decade Esau & Hueber has turned itself into a full range supplier, most obviously in response to globalisation churning out global brewing behemoths.

Sedlaczek: Before we integrated the German brewhouse technology of Nerb into our product portfolio in 2011, Esau & Hueber was exclusively focused on cold block technology. Thanks to buying Nerb’s know-how and expertise, we could extend our product range to brewhouses too. And yes, our clients don’t want to have to deal with too many individual suppliers that need coordinating. Take Carlsberg. We have become their preferred supplier for yeast technology in their existing breweries. But we only won the contract for their new brewery in Klaipeda because we were able to act as a full range supplier too. In effect, the evolution of Esau & Hueber over the past decade has been in response to some of our clients bulking up through globalisation. As other markets, including China and other Asian countries, prepare to go the way of the US with a boom in craft breweries looming, I want Esau & Hueber to be at the ready to benefit from this development.

Mr Sedlaczek, thank you for answering our questions.